COVID ravages retirement outcomes

Forty-five per cent of Australians are either scared or do not feel financially confident about retiring, while 23 per cent of Australians aged 30-65 say they will be forced to delay retirement due to COVID-19, according to research from Colonial First State. 

“The coronavirus pandemic has significantly changed the world, not only socially but financially too. These are extremely challenging times for many people,” said CFS general manager for product Kelly Power. “It has been a big [wake-up] call for those Australians in their prime working age regarding their employment, savings, expenses, investments and super, and many have been forced to get a better grasp of their finances.”

While those over 55 are more confident they can still retire as planned, Australians aged between 35-49 are the most sceptical and financially underprepared. However, women have been hit harder than men, with a third saying they do not feel confident about retiring as they have been able to save less during the pandemic. 

“The gender gap in the Australian superannuation system is a real issue that sees women financially disadvantaged in retirement,” Ms Power said. “It was an issue before the current crisis, and it will be an even bigger problem when we emerge from the recession.

“As an industry this is something that is concerning for us and we need to do everything we can to support women impacted by coronavirus, help them protect their wealth, and rebuild as the economy recovers.”

However, one positive from the pandemic is that people are engaging more with their superannuation and retirement prospects, with an additional 16 per cent of Australians checking on their super balances since the pandemic, on top of the 42 per cent that already check frequently. 

“It’s encouraging to see that Australians recognise the importance of super as a savings vehicle for retirement and are showing higher levels of engagement,” Ms Power said. “We know that there have been a lot of Australians needing to access their super early as a way of surviving income loss, but either way super has become a more important topic of discussion in Australian households.”